Russian President Vladimir Putin and Urkrainian President Leonid Kuchma reached a compromise over the repayment of Ukraine’s natural gas debts on December 1st and are expected to sign an agreement for rescheduling the debt payments by mid-month.

Russian and Ukrainian leaders met during a summit of ex-Soviet states in Belarus, agreeing to sign a memorandum of understanding concerning Ukraine’s debts, which amount to at least $1.4 billion. Putin said that: “After this [agreement] no one will be able to say again that Ukraine steals our gas like a thief in the night,” referring to allegations that Ukraine frequently siphons gas transported through the country to Russian customers in Europe.

Ukrainian Prime Minister Viktor Yushchenko said that: “We last night agreed with the Russians on all practical issues .… we will sign a final memorandum on December 15th, or maybe even before.”

The details of the proposed deal are unclear, but Kuchma said that: “We have agreed on restructuring. Russia has agreed to reschedule debts worth a total of $700 million.”

Kuchma and Putin had reached an agreement in October that Ukraine would cease siphoning and re-exporting Russian gas transported through it to Western Europe, after Russian energy major Gazprom had announced on October 19th that it had formed a consortium to build a new gas export pipeline that would bypass Ukraine.

On October 20th, Russian oil pipeline monopoly Transneft indicated that it had drafted a government resolution that, if approved, would allow it to construct an additional export pipeline bypassing Ukraine.